TerryKX Media
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Resources / ROAS Profitability Scenario Planner

Free PPC planning tool · eCommerce

ROAS Profitability Scenario Planner

Turn an advertising return into a clearer view of store economics. Compare revenue, refunds, order costs and contribution profit, then find the ROAS and advertising cost per order your assumptions can support.

Editable scenarios · examples, not benchmarksTransparent costs · formulas explained belowKeep your work · CSV, copy & PDF

1. Enter your store economics

Start with your actual data. The editable examples illustrate how the tool works; they are not recommended targets.

Changes the display currency only; amounts are not converted.

All spend, fees and outcomes must refer to the same period. This label does not rescale inputs.

Match the revenue definition used in your report. Selecting after-refund ROAS avoids deducting the same refunds twice.

Use the same tax and revenue basis as your attributed sales. Exclude sales tax / VAT collected for the tax authority.

Share of pre-refund sales refunded. This is a revenue rate, not a count of returned orders.

Product costs attributable to retained sales after refunds. Add losses on refunded sales separately below.

Enter only costs not included in COGS or the advanced cost fields.

Advanced costs · fees, fulfilment, refunds & overhead

Each cost is deducted once on the stated basis. If a fee is already included in another field, leave its separate input at zero. Zero means excluded.

Applied before refunds, for fees that are not recovered when a sale is refunded.

Unrecovered shipping and packing cost on every original order, including orders later refunded.

For flat transaction fees or other order costs not included elsewhere.

Lost product cost, return postage or other refund losses, expressed as a percentage of refunded revenue. Exclude costs already entered per order.

Enter the applicable fee in the selected currency. This tool does not automatically quote a management fee.

For example, allocated creative, tools or fixed overhead. Match the planning period and avoid duplication.

Compare three ROAS outcomes

Enter multiples: 3.5 means 3.5×, or 350%. Only ROAS changes across these scenarios; order mix and costs stay constant.

Set a commercial target

Calculations run in your browser. This tool does not submit your inputs. Saving assumptions on this device is optional; use care on shared computers.

2. Review the commercial outcome

Check contribution profit and cost ceilings together with the reported advertising return.

Break-even ROAS—Selected revenue basis · includes period costs
ROAS for your target—Uses your selected margin or profit goal
Base contribution profit—After all costs entered
Base contribution margin—Contribution profit ÷ net sales
Base advertising cost per order—Ad spend ÷ original placed orders
Break-even advertising cost per order—Includes period-cost allocation at this spend

Base case cost breakdown

Contribution profit comparison

Bars compare the magnitude of the three profits or losses. A loss is labelled with a minus sign and shown in brown; zero has no filled bar.

Compare the three scenarios

Expected counts may be fractional. They describe modelled averages, not guaranteed orders or customers. Money is displayed to two decimal places; calculations use unrounded values.

Test the assumptions that change the result

Check how a different return and a five-percentage-point change in product cost rate affect contribution profit. This is a sensitivity check, not a confidence interval or a prediction.

How the calculation works

Gross sales = ad spend × before-refund ROAS. If your ROAS already uses net sales, gross sales = ad spend × ROAS ÷ (1 − refund rate). Placed orders = gross sales ÷ pre-refund AOV. Net sales = gross sales × (1 − refund rate).

COGS and other percentage costs apply to net sales. Processing fees apply to gross sales. Order costs apply to all original orders. Additional refund losses apply only to refunded revenue.

Contribution profit = net sales − entered variable costs − ad spend − management fee − other period costs. Contribution margin = contribution profit ÷ net sales.

How break-even and targets work

Let K be the contribution retained from each gross sales dollar before advertising and period costs:

K = (1 − refund rate) × (1 − COGS rate − other net-sales cost rate) − gross-sales processing rate − order costs ÷ AOV − refund rate × unrecovered refund cost rate. Percentage inputs are converted to decimal rates.

Before-refund break-even ROAS = (ad spend + period costs) ÷ (ad spend × K). For an after-refund ROAS, multiply this threshold by (1 − refund rate). A profit-amount target adds the desired profit to the numerator; a margin target subtracts target margin × (1 − refund rate) from K in the denominator.

Break-even ad cost per order = AOV × K × ad spend ÷ (ad spend + period costs). This allocates fixed costs at the selected spend; it is not a universal CPA ceiling.

Use the results in an account review

  1. Use a consistent revenue definition across the ad platform, store and tool. Check whether refunds, discounts, shipping and taxes are already included.
  2. Include fees and unrecovered costs that continue to apply to refunded orders. Separate net-sales percentages from gross-sales or per-order costs.
  3. Compare the base case with the required ROAS and profit target, then stress-test costs before changing budgets. Margins and returns can change as spend increases.

What the model does not establish

This is a deterministic scenario model, not a forecast, an accounting profit-and-loss statement or evidence that advertising caused every attributed sale. Costs not entered, corporation tax, inventory financing, repeat purchases, customer mix and changes in fulfilment capacity are not modelled automatically.

Use first-order economics unless you deliberately enter a supported cohort or lifetime-value assumption elsewhere. Do not add repeat revenue to ROAS without matching its costs and time horizon. Reconcile overlapping platform attribution against store revenue.

Questions about the results

Does a high ROAS mean the campaign is profitable?

The answer depends on retained revenue and costs. Two stores with the same ROAS can produce different contribution profits because margins, refunds, order values and operating costs differ. Use the cost breakdown to locate the difference.

Which ROAS basis should I choose?

Choose before-refund when the reported sales value has not yet been reduced by refunds. Choose after-refund when refunds have already been removed. AOV remains the original pre-refund order value in both modes. At a 100% refund rate, after-refund ROAS cannot be used to reconstruct the original sales value.

Why is a target or break-even marked “Not achievable”?

There is no finite return that satisfies the selected target under the current cost assumptions. This occurs when contribution per sales dollar is zero or negative, or when a target margin consumes all available contribution before advertising and period costs. Changing the target or unit economics is necessary.

Is contribution profit the same as company net profit?

It is the surplus after the specific costs you entered. It becomes closer to an operating view as you add relevant overhead, but it does not automatically include every company expense or tax. Use the label and cost breakdown when sharing results.

Are my inputs saved or shared automatically?

This tool performs calculations in your browser and does not submit its inputs. Save on this device stores assumptions in this browser only when you press the button. Load saved restores them; Clear saved removes that saved copy. CSV, copied summaries and printed PDFs can contain the amounts you entered.